9911796707
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Issues:
Service tax liability for the period 1-4-2000 to 31-8-2000, penalty under Section 76 of the Finance Act, 1994, interest on the tax amount, discretion of assessing authority in imposing penalties. Analysis: The judgment pertains to a case involving Rent-a-Cab operators providing cab rental services who failed to pay service tax for the period 1-4-2000 to 31-8-2000 and did not file the necessary tax return. The original authority confirmed the demand of service tax with interest and penalties under Sections 76 and 77 of the Finance Act, 1994. The party's appeal against this decision was dismissed by the Commissioner (Appeals), leading to the present appeal. During the hearing, the party did not contest the service tax demand or the penalty of Rs. 500 but argued that the penalty of Rs. 14,902 under Section 76 was excessive. The party had paid the tax in 2002, and interest was yet to be paid. The counsel for the party requested leniency in the penalty amount, citing the Supreme Court's ruling in State of Madhya Pradesh v. Bharat Heavy Electricals Ltd., which emphasized the assessing authority's discretion in imposing penalties. The counsel admitted that the interest on the tax amount was unpaid but sought leniency in the penalty imposed under Section 76. The Tribunal acknowledged the party's commitment to pay the interest and reduced the penalty to Rs. 7,000, directing the appellants to pay this amount along with the interest on tax within a fortnight. Non-compliance would result in the withdrawal of the penalty reduction, and the impugned order would stand. In conclusion, the Tribunal disposed of the appeal by reducing the penalty amount based on the party's undertaking to pay the interest, emphasizing a lenient approach in the circumstances of the case. The decision highlighted the assessing authority's discretion in determining penalties and the importance of timely compliance with tax obligations.
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